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ODAC Newsletter - Mar 30

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre.

ODAC joins NEF

Today's Newsletter will be the last from ODAC as an independent charity. After ten years at the forefront of education on Peak Oil, the Trustees of ODAC have decided to wind up the charitable company. But this is not the end for our work on raising public awareness and promoting better understanding of the world's oil-depletion problem.

nef (the new economics foundation), with whom ODAC has been working on studies of the effect of oil prices on recessions, has generously agreed to take over the Newsletter for an initial period of three months, during which we will explore options for the long-term continuation of ODAC's work. nef will also take over ODAC's website to provide a home for the extensive archive that it has built up over the years.

Several members of ODAC's board of Trustees will form an advisory panel on energy for nef and to see through to publication the joint studies under way.

While we cannot quite raise a banner saying 'Job Done', ODAC can justifiably claim a major role in bringing Peak Oil into the heart of debate on the future for energy. From maverick to mainstream is a respectable record.

The Trustees of ODAC wish to express their appreciation of all the support we have received over the years, especially from our generous funders, volunteer newsgatherers and all who have taken up our message and have alerted policy makers to one of the great issues of today and tomorrow.

Thank you all, and while this is goodbye from us, it is also hello from nef.

Chris Patey
Chairman, ODAC

And in other news...

While awareness of peak oil has advanced light years since ODAC was founded over a decade ago, on the evidence of this week the same cannot be said for the conduct of British energy policy. Back in 2000, Tony Blair's government was blindsided by petrol protests that brought the country to a standstill in 48 hours. Mr Blair bore the scars, and while there was much to criticise in New Labour's energy policy—not least the invasion of Iraq—he developed emergency plans and did not allow a serious recurrence.

Twelve years on, David Cameron and his colleagues have either blundered into or deliberately engineered (take your pick) an entirely unnecessary run on fuel, prompting panic buying, garage closures and fist fights. With the government under pressure from hostile headlines over the granny tax, kitchen suppers and pasty-gate, Cabinet Office Minister Francis Maude evidently thought it would be a clever diversion to pick a fight with the 'enemy within'1. His hasty retreat, jerrycan between legs, suggests the entire manoeuvre was not just breathtakingly cynical—the strike threat seemed to be receding in any case—but also spectacularly cack-handed. Either way, would you buy a used-energy policy from these people?

Not if you were trying to develop renewable heat sources, you wouldn't. The long-awaited Renewable Heat Incentive (RHI) was due to be launched next week, but at the last minute the government has announced the policy will be delayed by at least a year. Given the history of the solar feed in tariff, the government naturally wants to avoid a fresh debacle, but this eleventh hour postponement only adds to the sense of panicky incompetence.

Another of the government's flagship policies, nuclear renewal, also suffered a significant setback this week, as Eon and RWE pulled out, putting their British nuclear joint venture up for sale. The companies insist the reason is a shortage of cash, following huge losses caused by the German nuclear shut-down and high gas prices, but it may well mean fewer nuclear plants are now built here. Two consortia remain in the game, one made up of French utility EDF and Britain's Centrica, the other consisting of GDF Suez of France and Spain's Iberdrola.

Politics were also prominent on the international energy scene this week, where a release from the Strategic Petroleum Reserve (SPR) looked more likely after comments from the French energy minister. Eric Besson told journalists that France had agreed to a US request to support the move, and that they and Britain were now awaiting a decision from the International Energy Agency. For its part, the IEA issued a statement insisting SPR stocks are only ever released in response to a genuine physical shortage, and not simply to douse rising prices. However, with both the US—the IEA's biggest shareholder—and France embroiled in presidential election campaigns, the Agency's purism will continue to be tested.

Rising oil prices are not just a problem for importing countries, which will pay a record $2 trillion this year, but also for oil exporters keen not to kill the golden goose—if that is an entirely suitable description of the world economy these days. But there's not much the producers can do about the problem, it seems. Saudi oil minister Ali Al Naimi wrote in the Financial Times that the market is well supplied and current prices are not justified, and repeated his recent claims of ample spare capacity. An alternative view would be that the Kingdom is pumping at a thirty-year high of more than 10 mb/d, spare capacity is wafer thin by historical standards, and Brent crude at more than $120 per barrel is entirely justified by the fundamentals.

Back in Britain, the need to reduce our fossil fuel dependency was reinforced by figures showing that UK North Sea oil production dropped by 17.5% last year and gas production fell 21%. Some of the slump was due to maintenance, but the underlying decline rate has been steep for over a decade. This year's production may be further affected by the leak at Total's Elgin platform, which has also shut down Shell's Shearwater platform nearby—gas prices firmed as a result. The real question is how long the leak will continue. If a relief well is required and takes 6 months to drill, as Total has suggested, the climate impact of the methane could be significant.

1. http://news.bbc.co.uk/1/hi/3067563.stm

NOTE: There will be no newsletter next week, April 6th, due to the Easter Holiday.

Oil

US, UK and France consider oil release to curb fuel prices

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Saudi Arabia resorts to Jedi mindtricks

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World oil import bill heading for record 1.25 trillion pounds

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Oil Futures Spark Debate on $100 Level

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U.S. Stymies Iran's Iraq Oil Plan

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Report: Gulf Oil Spill Killed Life Deep Beneath Sea Level

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Shell Sued in U.K. Over 'Massive' 2008 Nigerian Oil Spills

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Gas

Flare still burning on North Sea gas leak platform

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Total's Gas Leak Shows Risks of High-Pressure Fields

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Coal

For New Generation of Power Plants, a New Emission Rule From the E.P.A.

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Nuclear

RWE npower and E.ON halt nuclear plant development

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Probe finds high radiation in damaged Fukushima reactor

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Nearly 200 arrested in India nuclear protest

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Renewables

Denmark overhauls green targets and commits to 50 per cent wind power

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MuckBuster brings "waste-to-energy in a shipping container" to a canteen near you

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UK

Panic-buying of fuel continues despite prospect of peace talks

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Fuel strike threat: Petrol stations run dry

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Fuel Strike Fears: PM To Hold Cobra Meeting

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UK gas imports outstrip production for first time since 1967

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UK emissions fall seven per cent as renewable energy soars

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Renewable heat incentive scheme delayed for a year

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The heat map of England

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Budget 2012: Oil companies enjoy unintended North Sea tax 'windfall'

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Economy

UK heading back into recession, says OECD

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What do you think? Leave a comment below.

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